Students More Ready For College—But Less Likely To Go, As Budget Cuts Take Toll

SAN FRANCISCO, May 9, 2012—The share of California high school graduates enrolling in the state’s public colleges and universities has declined significantly over the past five years, despite increasing demand for higher education. This is the conclusion of a report by the Public Policy Institute of California (PPIC) examining the impact of declining state support on enrollment at the University of California (UC), the California State University (CSU), and community college systems.

Enrollment rates at UC and CSU have fallen by one-fifth, from about 22 percent of all California high school graduates in 2007 to less than 18 percent in 2010. Among the state’s most highly prepared high school graduates—those who complete courses required for admission to these colleges—enrollment has declined even more: from about 67 percent to 55 percent.

These declines coincide with actions taken by these university systems to limit enrollment, as well as with the most dramatic increases in tuition and fees in the history of these institutions.

Among the report’s other key findings:

While enrollment rates in community colleges have increased slightly—from about 34 percent in 2006 to about 35 percent in 2009—this is not enough to make up for the declines at UC and CSU.

The drop in enrollment rates is not a result of a decline in applicants’ qualifications. The share of high school graduates who complete classes required for UC and CSU admission—known as A-G courses—is at historically high levels for every ethnic group in the state. Yet enrollment rates at these universities are declining for each group and are sharpest among African Americans.

The number of recent high school graduates leaving California for four-year colleges in other states appears to have increased.

The report’s author, Hans Johnson, a Bren policy fellow at PPIC, notes that the state can ill afford these losses. PPIC has projected that the state will fall 1 million college graduates short of economic demand by 2025 unless enrollment and graduation rates improve substantially.

"Sizeable numbers of high school graduates are less likely to enroll in a California university than they were just a few years ago,” Johnson says. "This is precisely the wrong direction California should be headed to meet the future demand for highly educated workers.”

State general fund spending on higher education has declined notably in California. The state now spends more on corrections than on public universities. Over the last 10 years, general fund spending fell 9 percent for higher education and increased 26 percent for corrections.

At the same time, demand for college is growing. The number of high school graduates rapidly increased to an all-time high of 405,000 in 2010 and is expected to remain high.

In response to the decline in state support, UC and CSU have rapidly raised tuition and fees. All three branches of the public higher education system have acted to limit enrollment. UC has reduced its enrollment targets, prompting many campuses to become more selective. UC places eligible applicants not admitted to their campuses of choice in a "referral pool” for admission to a less selective campus. The size of this pool has grown dramatically, to more than 10,000 students. In other words, an increasing number of students are being accepted at campuses for which they did not apply. Students are much less likely to attend a college that is not their first choice.

CSU designates its more popular campuses as "impacted,” meaning that students generally outside the local admission area are required to have higher grades and test scores to be admitted. For students applying for fall 2012, 16 of the 23 campuses are impacted. Moreover, the number of students who met eligibility criteria but were not offered admission at CSU campus grew from less than 4,000 in fall 2008 to more than 12,000 in fall 2011.

Community colleges do not cut admissions to reduce costs but have rationed enrollment by increasing class sizes and reducing programs and course offerings. An indication of the impact of these practices is the growing share of students who attend more than one community college.

Increased state funding for higher education would almost certainly reverse these enrollment trends. Policymakers and higher education officials are exploring ways to increase funding, including a statewide initiative planned for this fall. The report notes that policymakers should also take steps to ensure that state higher education funds are allocated as efficiently as possible and offers some suggestions:

Address students’ concerns about costs and debt burdens. One approach would be to guarantee a set, four-year tuition schedule, as other states do.

Prioritize spending where it will create the greatest benefit, based on an evaluation of which institutions have the best track record of serving their students.

Fund public colleges and universities based at least partly on results—such as graduation rates—rather than solely on student enrollment.

The report cautions that such strategies—while helpful—cannot completely overcome the hardship brought on by the combination of severe budget cuts and high demand. The report is called Defunding Higher Education: What Are the Effects on College Enrollment? It is supported with funding from the Donald Bren Foundation and The James Irvine Foundation.

ABOUT PPIC

PPIC is dedicated to informing and improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett. As a private operating foundation, PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it endorse, support, or oppose any political parties or candidates for public office.